Excess DBCBS - If week 1 tax code applied - what to do if you pay over 20% and you are not due to pay that

[stephen500]

Section B/C members may receive what is know as an Excess DBCBS Uncrystallised fund pension lump sum (UFPLS).
For this members get 25% tax free and are due to pay tax on 75% of that amount at their tax rate.
I just spoke to the tax office and they advised me that the RMPP may apply a week one code, meaning on £7865 I could end up paying £2146 tax, when only £1179 would be due.
Ie some at 40%.
As I am leaving RM in Nov and will not be having another income apart from my RMSPS and RMPP pensions, I will not be earining about the threshold of £50,000 to pay 40% tax.
So HRMC just advised me, if RMPP take £2146, to apply for a refund of £967 using form P53Z.
https://www.gov.uk/government/publicati ... mp-sum-p53
So if you are in a similar postion, you could use this form to claim back any excess tax you pay on your excess DBCBS.
Btw.
They also told me if I pay tax on my annual pension, as I will not be due to pay tax, as I am stopping work and my paye tax is up to day, then to ring HRMC when I get my P45 and they will arrange for my tax code to be altered to refund any tax paid.

[freespeech]

Section B/C members may receive what is know as an Excess DBCBS Uncrystallised fund pension lump sum (UFPLS).
For this members get 25% tax free and are due to pay tax on 75% of that amount at their tax rate.
I just spoke to the tax office and they advised me that the RMPP may apply a week one code, meaning on £7865 I could end up paying £2146 tax, when only £1179 would be due.
Ie some at 40%.
As I am leaving RM in Nov and will not be having another income apart from my RMSPS and RMPP pensions, I will not be earining about the threshold of £50,000 to pay 40% tax.
So HRMC just advised me, if RMPP take £2146, to apply for a refund of £967 using form P53Z.
https://www.gov.uk/government/publicati ... mp-sum-p53
So if you are in a similar postion, you could use this form to claim back any excess tax you pay on your excess DBCBS.
Btw.
They also told me if I pay tax on my annual pension, as I will not be due to pay tax, as I am stopping work and my paye tax is up to day, then to ring HRMC when I get my P45 and they will arrange for my tax code to be altered to refund any tax paid.

If your monthly pension payments are above your personal allowance you will pay tax....it's income. You don't pay NI on pension payments though.

[stephen500]

Section B/C members may receive what is know as an Excess DBCBS Uncrystallised fund pension lump sum (UFPLS).
For this members get 25% tax free and are due to pay tax on 75% of that amount at their tax rate.
I just spoke to the tax office and they advised me that the RMPP may apply a week one code, meaning on £7865 I could end up paying £2146 tax, when only £1179 would be due.
Ie some at 40%.
As I am leaving RM in Nov and will not be having another income apart from my RMSPS and RMPP pensions, I will not be earining about the threshold of £50,000 to pay 40% tax.
So HRMC just advised me, if RMPP take £2146, to apply for a refund of £967 using form P53Z.
https://www.gov.uk/government/publicati ... mp-sum-p53
So if you are in a similar postion, you could use this form to claim back any excess tax you pay on your excess DBCBS.
Btw.
They also told me if I pay tax on my annual pension, as I will not be due to pay tax, as I am stopping work and my paye tax is up to day, then to ring HRMC when I get my P45 and they will arrange for my tax code to be altered to refund any tax paid.

If your monthly pension payments are above your personal allowance you will pay tax....it's income. You don't pay NI on pension payments though.

my monthly pension payments won't be. You are allowed £240 tax allowance weekly, my pension will be £240. I am up to date with PAYE payments. So HrMc confirmed today, I will not pay tax on my pension for the rest of the tax year. As soon as I get my p45, I am to contact hrmc and they will correct any payment I make in tax in Nov and correct it for Dec. As long as I don't work again for the rest of the tax year, I won't pay tax on my pension. As for excess fund, as my income this tax year including pension will be £30k, I am liable for only 20 % on the 75% of my excess and if I pay more I have to fill in the form above to get a rebate.

[freespeech]

Section B/C members may receive what is know as an Excess DBCBS Uncrystallised fund pension lump sum (UFPLS).
For this members get 25% tax free and are due to pay tax on 75% of that amount at their tax rate.
I just spoke to the tax office and they advised me that the RMPP may apply a week one code, meaning on £7865 I could end up paying £2146 tax, when only £1179 would be due.
Ie some at 40%.
As I am leaving RM in Nov and will not be having another income apart from my RMSPS and RMPP pensions, I will not be earining about the threshold of £50,000 to pay 40% tax.
So HRMC just advised me, if RMPP take £2146, to apply for a refund of £967 using form P53Z.
https://www.gov.uk/government/publicati ... mp-sum-p53
So if you are in a similar postion, you could use this form to claim back any excess tax you pay on your excess DBCBS.
Btw.
They also told me if I pay tax on my annual pension, as I will not be due to pay tax, as I am stopping work and my paye tax is up to day, then to ring HRMC when I get my P45 and they will arrange for my tax code to be altered to refund any tax paid.

If your monthly pension payments are above your personal allowance you will pay tax....it's income. You don't pay NI on pension payments though.

my monthly pension payments won't be. You are allowed £240 tax allowance weekly, my pension will be £240. I am up to date with PAYE payments. So HrMc confirmed today, I will not pay tax on my pension for the rest of the tax year. As soon as I get my p45, I am to contact hrmc and they will correct any payment I make in tax in Nov and correct it for Dec. As long as I don't work again for the rest of the tax year, I won't pay tax on my pension. As for excess fund, as my income this tax year including pension will be £30k, I am liable for only 20 % on the 75% of my excess and if I pay more I have to fill in the form above to get a rebate.

I'm confused.....the personal tax allowance for this year is £12,500 so stay under that and there is no tax to pay. Your pension on its own does that.......but you then say your income this year inc pension will be £30k. This suggests you will pay BR tax on £17.5k.

[stephen500]

Section B/C members may receive what is know as an Excess DBCBS Uncrystallised fund pension lump sum (UFPLS).
For this members get 25% tax free and are due to pay tax on 75% of that amount at their tax rate.
I just spoke to the tax office and they advised me that the RMPP may apply a week one code, meaning on £7865 I could end up paying £2146 tax, when only £1179 would be due.
Ie some at 40%.
As I am leaving RM in Nov and will not be having another income apart from my RMSPS and RMPP pensions, I will not be earining about the threshold of £50,000 to pay 40% tax.
So HRMC just advised me, if RMPP take £2146, to apply for a refund of £967 using form P53Z.
https://www.gov.uk/government/publicati ... mp-sum-p53
So if you are in a similar postion, you could use this form to claim back any excess tax you pay on your excess DBCBS.
Btw.
They also told me if I pay tax on my annual pension, as I will not be due to pay tax, as I am stopping work and my paye tax is up to day, then to ring HRMC when I get my P45 and they will arrange for my tax code to be altered to refund any tax paid.

If your monthly pension payments are above your personal allowance you will pay tax....it's income. You don't pay NI on pension payments though.

my monthly pension payments won't be. You are allowed £240 tax allowance weekly, my pension will be £240. I am up to date with PAYE payments. So HrMc confirmed today, I will not pay tax on my pension for the rest of the tax year. As soon as I get my p45, I am to contact hrmc and they will correct any payment I make in tax in Nov and correct it for Dec. As long as I don't work again for the rest of the tax year, I won't pay tax on my pension. As for excess fund, as my income this tax year including pension will be £30k, I am liable for only 20 % on the 75% of my excess and if I pay more I have to fill in the form above to get a rebate.

I'm confused.....the personal tax allowance for this year is £12,500 so stay under that and there is no tax to pay. Your pension on its own does that.......but you then say your income this year inc pension will be £30k. This suggests you will pay BR tax on £17.5k.

Every ones tax allowance is spread over 52 weeks at £240 per week and you pay tax on your income above £240. My gross pay last week was £707 pounds, that meant I was due to pay tax on £467, which is £93 which is what I paid. That means I am up to date with my tax on paye. Now if I leave work, I am still allowed to earn £240 per week. My pension will be exactly £240 per week and my earnings with royal mail will cease. Which means as I will have no income except my pension, that I will not pay any tax on it, or as the lady at Hrmc told me today, it will be refunded on month 2 of my monthly pension payments such will be in December. To not pay tax you have to stop working and not have an income above £240 per week if you paid tax on paye.paye spreads your tax, otherwise you would pay nothing till you earned £12500 and then 20% on everything Nb my pension is actually £11800 a year but I will only be getting it for 5 months this tax year.

[freespeech]

Section B/C members may receive what is know as an Excess DBCBS Uncrystallised fund pension lump sum (UFPLS).
For this members get 25% tax free and are due to pay tax on 75% of that amount at their tax rate.
I just spoke to the tax office and they advised me that the RMPP may apply a week one code, meaning on £7865 I could end up paying £2146 tax, when only £1179 would be due.
Ie some at 40%.
As I am leaving RM in Nov and will not be having another income apart from my RMSPS and RMPP pensions, I will not be earining about the threshold of £50,000 to pay 40% tax.
So HRMC just advised me, if RMPP take £2146, to apply for a refund of £967 using form P53Z.
https://www.gov.uk/government/publicati ... mp-sum-p53
So if you are in a similar postion, you could use this form to claim back any excess tax you pay on your excess DBCBS.
Btw.
They also told me if I pay tax on my annual pension, as I will not be due to pay tax, as I am stopping work and my paye tax is up to day, then to ring HRMC when I get my P45 and they will arrange for my tax code to be altered to refund any tax paid.

If your monthly pension payments are above your personal allowance you will pay tax....it's income. You don't pay NI on pension payments though.

my monthly pension payments won't be. You are allowed £240 tax allowance weekly, my pension will be £240. I am up to date with PAYE payments. So HrMc confirmed today, I will not pay tax on my pension for the rest of the tax year. As soon as I get my p45, I am to contact hrmc and they will correct any payment I make in tax in Nov and correct it for Dec. As long as I don't work again for the rest of the tax year, I won't pay tax on my pension. As for excess fund, as my income this tax year including pension will be £30k, I am liable for only 20 % on the 75% of my excess and if I pay more I have to fill in the form above to get a rebate.

I'm confused.....the personal tax allowance for this year is £12,500 so stay under that and there is no tax to pay. Your pension on its own does that.......but you then say your income this year inc pension will be £30k. This suggests you will pay BR tax on £17.5k.

Every ones tax allowance is spread over 52 weeks at £240 per week and you pay tax on your income above £240. My gross pay last week was £707 pounds, that meant I was due to pay tax on £467, which is £93 which is what I paid. That means I am up to date with my tax on paye. Now if I leave work, I am still allowed to earn £240 per week. My pension will be exactly £240 per week and my earnings with royal mail will cease. Which means as I will have no income except my pension, that I will not pay any tax on it, or as the lady at Hrmc told me today, it will be refunded on month 2 of my monthly pension payments such will be in December. To not pay tax you have to stop working and not have an income above £240 per week if you paid tax on paye.paye spreads your tax, otherwise you would pay nothing till you earned £12500 and then 20% on everything

I get all that........but you have said your "income this tax year including pension will be £30k".

[stephen500]

Section B/C members may receive what is know as an Excess DBCBS Uncrystallised fund pension lump sum (UFPLS).
For this members get 25% tax free and are due to pay tax on 75% of that amount at their tax rate.
I just spoke to the tax office and they advised me that the RMPP may apply a week one code, meaning on £7865 I could end up paying £2146 tax, when only £1179 would be due.
Ie some at 40%.
As I am leaving RM in Nov and will not be having another income apart from my RMSPS and RMPP pensions, I will not be earining about the threshold of £50,000 to pay 40% tax.
So HRMC just advised me, if RMPP take £2146, to apply for a refund of £967 using form P53Z.
https://www.gov.uk/government/publicati ... mp-sum-p53
So if you are in a similar postion, you could use this form to claim back any excess tax you pay on your excess DBCBS.
Btw.
They also told me if I pay tax on my annual pension, as I will not be due to pay tax, as I am stopping work and my paye tax is up to day, then to ring HRMC when I get my P45 and they will arrange for my tax code to be altered to refund any tax paid.

If your monthly pension payments are above your personal allowance you will pay tax....it's income. You don't pay NI on pension payments though.

my monthly pension payments won't be. You are allowed £240 tax allowance weekly, my pension will be £240. I am up to date with PAYE payments. So HrMc confirmed today, I will not pay tax on my pension for the rest of the tax year. As soon as I get my p45, I am to contact hrmc and they will correct any payment I make in tax in Nov and correct it for Dec. As long as I don't work again for the rest of the tax year, I won't pay tax on my pension. As for excess fund, as my income this tax year including pension will be £30k, I am liable for only 20 % on the 75% of my excess and if I pay more I have to fill in the form above to get a rebate.

I'm confused.....the personal tax allowance for this year is £12,500 so stay under that and there is no tax to pay. Your pension on its own does that.......but you then say your income this year inc pension will be £30k. This suggests you will pay BR tax on £17.5k.

Every ones tax allowance is spread over 52 weeks at £240 per week and you pay tax on your income above £240. My gross pay last week was £707 pounds, that meant I was due to pay tax on £467, which is £93 which is what I paid. That means I am up to date with my tax on paye. Now if I leave work, I am still allowed to earn £240 per week. My pension will be exactly £240 per week and my earnings with royal mail will cease. Which means as I will have no income except my pension, that I will not pay any tax on it, or as the lady at Hrmc told me today, it will be refunded on month 2 of my monthly pension payments such will be in December. To not pay tax you have to stop working and not have an income above £240 per week if you paid tax on paye.paye spreads your tax, otherwise you would pay nothing till you earned £12500 and then 20% on everything

I get all that........but you have said your "income this tax year including pension will be £30k".

See below

[stephen500]

My paye tax for 20/21 Weeks 1 to 29 avg earning £707 in total £20561, tax allowance £6960, tax paid 2720. Weeks 30 to 34 gross £3545, tax all £1200, tax paid £469, so up to week 34 incl £24106 gross, tax allowance £8160, tax paid £3139, weeks 35 to 52 pension income only £4080, tax allowance £4080, tax to pay zero (I have said weekly for ease of comparasion, althought pension is paid monthly). Total earnings for year £28186, tax allowance used £12240, tax paid £3189. Tax due was £3189.. yes my earnings for this tax year will be £28186 inc pension. But not incl excess cash balance that in will pay tax at source on 75% of that sum. But I won't pay tax on my monthly pension and the lady from HRMC agrees with my calculations.

[Woody Guthrie]

I think the idea that under PAYE every week you have a tax allowance of £240 is the easiest to comprehend Stephen.
As long as every week you pay the correct tax for anything over that any week you only earn £240 or below you don't pay any tax.
It's really pretty clear.

[stephen500]

I think the idea that under PAYE every week you have a tax allowance of £240 is the easiest to comprehend Stephen.
As long as every week you pay the correct tax for anything over that any week you only earn £240 or below you don't pay any tax.
It's really pretty clear.

Yes that was the point I was trying to make. Last week I earned £707.91 I take away my tax allowance of £240 (£12,500 divided by 52) That means I had to pay 20% tax on £467 which is £93.40. I paid £94 tax. So that means I have used up all my allowance for last week and paid the correct tax for that week. As I do that every week, that means I am straight with the tax man. So when I cease work and my only income is my pension and that works out for me around £240 per week and as I have a tax allowance of £240 a week, I will owe no tax, unless I take up other employment or gain another income, or receive my state pension.